Interview with Marc Katz – Past, Present & Future of CustomInk

What makes one custom t-shirt company shoot up the Google rankings? CustomInk CEO Marc Katz knows a thing or two about taking a company to the big time. So we took some time to pick his brain about CustomInk’s rise to success, effective business strategies, and the future of the custom apparel industry.

T-Shirt Talk: Thanks for taking the time to talk with us, Marc! We’ve read many stories about CustomInk’s Golden Rule business strategy, entrepreneurial stories of you and your father, and the fact that your reviews are 100% unfiltered. But we don’t want to just keep talking about the same thing everyone else does – we want to gain new insights into CustomInk’s success, strategy, and vision for the future of both the business and the industry in general. Sound good?

Marc Katz: (laughing) Sure! Talking about new things is good.

TST: It seems like everyone knows who CustomInk is. How did this happen? How did you go from such a small company at such a bad time for dotcoms to sitting on a throne at the top of a profitable t-shirt industry?

MK: Well, not everybody knows about CustomInk. I would certainly like them to, though! I think that you’ve got to have an end of the yarn to pull on to begin with – for us, that was paid search back in the day when you could do search engine marketing on goto.com for 25 cents a click. Then, Google Adwords started, and so on.

TST: Was that important in keeping CustomInk visible?

MK: I’ve really got to say that from the very beginning, we really went nuts about each customer’s satisfaction, not with the intent to build a large customer base, but simply to overwhelmingly delight people individually. When we combined that with a decent flow of early customers, it had a multiplying effect. It generated repeat and referral customers, and fed a strong organic search presence.

TST: What about now? Has that model remained the same?

MK: Yes. These days, about two thirds of our business comes from repeats and referrals. However, from our market analyses, we still think that we’ve got a long way to go.

TST: Who are these customers and what do they order?

MK: We’re really about the group and occasion customer. We do print single items, and it’s healthy, but our bread and butter is bulk. Doing bulk is very different than one-offs. Bulk orders are closely tied to our focus on service – we want groups to be emotionally invested in their experience. Custom t-shirts aren’t a cheap promo, they’re very sentimental. Hopefully that customer is going to love that shirt for 20 years.

TST: Is that a conservative estimate? (laughing)

MK: (laughing) Well, I have a few 20 year old shirts that I could never throw away, to be honest! Having that shirt means that I was part of something – it’s a reminder, a bond.

TST: There have been some big changes to the custom t-shirt industry since you started – the most shining example is direct to garment printing. How has DTG printing affected CustomInk?

MK: DTG has been very important – we use DTG for all of our singles, and some of our bulk when we think that it will give the best result. We’re still doing more screen printing. The quality is really the key for screen printing.

TST: DTG seemed to level the playing field a bit, at least for bigger companies like yourself, Cafepress, and Zazzle. How did you deal with your bigger competition?

MK: From very early on, we felt that Cafepress and Zazzle were focused on a different opportunity than we were – they were far more directed towards individual consumers who often bought pre-existing designs that could be printed on demand, as opposed to creating a custom design for themselves.

Additionally, we were doing bulk orders for the first few years, exclusively, and these days, bulk orders still make up most of our business.

TST: So doing bulk is what set you apart from your competition? Did you see a measurable impact in brand awareness from doing bulk rather than individual orders?

MK: Well, it was easy early on to think that our bulk model would lead to a more viral spread of our brand, but it didn’t quite work that way. People don’t seem to just talk about shirts, no matter how much you want them to.

The practical operating difference between CustomInk and Cafepress or Zazzle – especially Zazzle – is that when you read their copy, they tout about how automated their business process is. Your order goes from screen, to printer, to shipping, “automagically.” With CustomInk, it’s a personal process – every single order gets personal attention.

TST: How much personal attention? How do you afford that with your volume?

MK: The economics do work on an order by order basis. Not every order is a money-maker, but overall, providing that level of service doesn’t lose us money. However, building the original infrastructure – the website, the general operating overhead -lost us money for a while. We covered that with seed financing, but when the bubble burst, the venture financing that we had imagined never came to fruition. It was quite a while before we realized that we didn’t need it. The whole time that we were getting the business working, we were scraping together seed investors here and there to pay the bills and finance our losses, and we were looking for a bigger VC round, unsuccessfully.

We reached a point a year and half into the business where we realized that it wasn’t going to happen – but if we just stayed the course, we could pay our own way. Then, tragically, 9/11 happened – that set things back quite a bit actually, and the ensuing winter was very lean. We saw business drop almost 40% immediately, off of already small numbers. We didn’t have a great understanding of the seasonality of the market at that point – it took 5-6 months to recover. In mid 2002, we turned the corner to profitability. It was really a matter of tactics, not strategy, at that point – we just got really good at paid search marketing very early on before it was fashionable and still inexpensive.

TST: Since internet marketing has been one of your greatest advantages, you must have been concerned about brand identity. Not that long ago, you guys finally made the jump to a complete branding set with Inky, your logo, custom fonts, and redesigns of your website and design tool. What took so long and how effective has branding been for you?

MK: I feel like what branding really came down to was a decision and a concerted effort to take what the company was all about internally and on a one to one basis and project that outwardly. Previously CustomInk came off generic – we had a distinctive internal identity, but that wasn’t represented to the world. After a decade of getting the process down and earning trust one customer at a time, we finally told everyone who we were through our branding.

TST: Now that you are at the top of your industry — how is CustomInk going to lead the custom apparel industry?

MK: We are focused on custom t-shirts and complimentary items, as opposed to customizing every product possible. There is something special and powerful about t-shirts in particular, so that’s where our focus is. That’s where feel we need to take leadership responsibility. In general terms, we believe that we’re going to lead the way in raising the bar on what the market can expect from the industry – quality, design, speed, etc. The more fundamental thing is that we want to change people’s perception of custom apparel – we want to engage them in the idea that custom t-shirts are not just ordinary garments.

TST: I think that your customer photo contest really shows that people care about t-shirts. It’s almost strange that people are not just willing but ecstatic and excited to share their CustomInk experience.

MK: We have tens of thousands of pictures that customers send in – what does it mean? Apparently, it’s human nature to put on a shirt and then stand in a group and take a picture – maybe that goes back to cave men painting their bodies to identify with each other (laughing). Our slogan — “T-shirts Unite” — conveys that. We want to get the public to identify and appreciate that, and it’s fascinating to see how overwhelmingly positive their response is.

TST: There are many new online apparel companies that are struggling for visibility against larger competitors such as yourselves. What advice do you have for emerging businesses in this industry?

MK: Don’t bother competing with us. (laughing) I guess I would say, if you do a great job for your customers, even if you’re small, you’ll have a business. Substance counts for everything.
I always reached out to people who were further down the road building the kind of company that I wanted to have – I found that almost always, those people aren’t just willing, but are eager to give back to another entrepreneur. I try to do that now – I’ll get contacted by entrepreneurs who are looking for some input, or guidance, or just a sounding board and I’m happy to do it. There’s a pay it forward mentality among entrepreneurs. The best advice is to try to get out there and share your ideas and bounce them off people who are further along than you.

TST: What about for companies that are specifically interested in t-shirts, like yourselves?

MK: In terms of advice specific to custom t-shirts and not just custom apparel, I guess I would say that people should really try to carve out a specific niche, unless they think they have some better way of doing the whole shebang – in which case, please call me. We have a lot of imitators now doing what we do. Some of them are good businesses, but unfortunately now there are so many turnkey online design apps and sites available for white label that I don’t think just launching another site without support and content to back it up is very smart.
Obviously we wouldn’t mind not having the competition or the noise – but that’s just the reality of it.

TST: Where do you see the print-on-demand category headed?

I think there is the potential for convergence among companies – you’ve got companies that have really come at the on-demand printing business from different angles and mediums (direct vs. marketplace, or apparel v. paper). As these markets mature, I wonder how much convergence there will be – I really do wonder, not rhetorically. Ten years from now, are Cafepress and Vistaprint going to be the same thing, and just competitors? Are they going to converge?

TST: I really appreciate your insights into both your own company, the t-shirt industry. Any last words before we wrap up here?

MK: Our customer reviews… they truly are uncensored. Honesty and transparency is key. It keeps us honest, and attracts the right kind of people to the company, too. We don’t want someone who is a slacker, and a slacker doesn’t want to be somewhere where a customer can comment on their bad service. Unfortunately, there is some cynicism – a lot of people look at our uncensored reviews and just don’t believe it. But it really is real. Really.

TST: Marc, thank you so much for being so open, candid, & honest with us today. We wish you and the CustomInk success in all your endeavors.

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[…] tools, displaying uncensored customer reviews, and fanatical about great customer service (see our interview with the founder of CustomInk). As a result they have been very successful with over $80 million in sales last year. It is a lot […]